Bettinghttp://www.businessinsider.com/category/betting
en-usSun, 02 Aug 2015 14:41:39 -0400Sun, 02 Aug 2015 14:41:39 -0400The latest news on Betting from Business Insiderhttp://static3.businessinsider.com/assets/images/bilogo-250x36-wide-rev.pngBusiness Insiderhttp://www.businessinsider.com
http://www.businessinsider.com/grexit-william-hill-stopped-taking-bets-on-greece-leaving-the-eurozone-2015-6One of Britain's biggest bookmakers just stopped taking Grexit bets because the situation is so crazyhttp://www.businessinsider.com/grexit-william-hill-stopped-taking-bets-on-greece-leaving-the-eurozone-2015-6
Mon, 29 Jun 2015 04:42:00 -0400Oscar Williams-Grut
<p><img style="float:right;" src="http://static4.businessinsider.com/image/5591051bdd0895c57e8b45e5-1200-924/an-anti-austerity-protester-burns-a-euro-note-during-a-demonstration-outside-the-european-union-eu-offices-in-athens-greece-june-28-2015-greece-said-it-may-impose-capital-controls-and-keep-its-banks-shut-on-monday-after-creditors-refused-to-extend-the-countrys-bailout-and-savers-queued-to-withdraw-cash-taking-athens-standoff-with-the-european-union-and-the-international-monetary-fund-to-a-dangerous-new-level.jpg" border="0" alt="An anti-austerity protester burns a euro note during a demonstration outside the European Union (EU) offices in Athens, Greece June 28, 2015. Greece said it may impose capital controls and keep its banks shut on Monday after creditors refused to extend the country's bailout and savers queued to withdraw cash, taking Athens' standoff with the European Union and the International Monetary Fund to a dangerous new level. "></p><p>Greece is causing a huge headache for bookmakers right now.</p>
<p>A <a href="http://uk.businessinsider.com/greece-looks-set-to-default-on-tuesday-june-30-2015-6?r=US">looming referendum</a> and <a href="http://uk.businessinsider.com/greece-bank-holiday-2015-6">capital controls in Greece</a> are making it really difficult for bookies to calculate the odds of a Grexit because the situation is <a href="http://uk.businessinsider.com/greek-referendum-european-markets-tank-2015-6">just so unpredictable</a>.</p>
<p>William Hill, one of Britain's bookmakers, has stopped taking bets on whether Greece will leave the EU, saying the situation is too volatile. Ladbrokes, another of the so-called "Big Four" bookies in the UK, is also considering closing its book on Greece, a spokesperson told Business Insider over email.</p>
<p>William Hill's spokesperson Graham Sharpe told Business Insider over email: "In such a volatile situation in which events can move very quickly it is very difficult to be confident that our odds are accurate. The only option people have been wanting to back for the past couple of days is that Grexit will happen this year and as we can no longer hope to balance our market, we have decided to pull the plug."</p>
<p>Basically, all the money is being bet on Greece leaving the Eurozone this year. Bookies adjust their odds to make sure they reflect how likely any outcome is, but at the moment it's just too close to call. And because not enough people are betting on Greece staying in, it's getting more and more likely William Hill will lose money. Therefore it's throwing in the towel on the whole thing.</p>
<p>Before it stopped taking bets, William Hill offered 3/1 odds on a Grexit this year, meaning if you bet £1 you'd get £3 back. It also means William Hill thinks there's a 25% chance of Greece leaving Europe this year.</p>
<p>Greece is now William Hill's 1/3 favourite to be the first country to leave the European Union, with the UK second favourite at 4/1 and Hungary third favourite at 12/1.</p>
<p>Ladbrokes is mainly taking bets on the outcome of the referendum, with odds of&nbsp;4/7 on Greek's saying yes to the bailout deal and 5/4 for no. That makes a "no" vote the favourite, with a 55% probability of an exit.</p>
<p>Ladbrokes spokesperson Alex Donohue told Business Insider over email: "80% of money is for yes. The total stake levels is in low thousands but we expect that to explode this week as the story develops."</p>
<p>Paddy Power, another of the "Big Four," is still taking bets, with odds of 11/8 that Greece will leave the Eurozone this year. That means Paddy Power is much more bullish about a Grexit — those odds work out at a 57% chance of an exit.</p>
<p>Coral, the final bookie in Britain's "Big Four," also continues to not &nbsp;bets on Greece.</p><p><a href="http://www.businessinsider.com/grexit-william-hill-stopped-taking-bets-on-greece-leaving-the-eurozone-2015-6#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="http://www.businessinsider.com/new-omega-globemaster-watch-unboxing-2015-5">Forget the Apple Watch — here's the new watch everyone on Wall Street wants</a></p> http://www.businessinsider.com/ladbrokes-shares-jump-10-merger-talks-gala-coral-2015-6Ladbrokes is exploding after confirming deal talkshttp://www.businessinsider.com/ladbrokes-shares-jump-10-merger-talks-gala-coral-2015-6
Tue, 23 Jun 2015 04:04:30 -0400Oscar Williams-Grut
<p>Ladbrokes shares are surging Tuesday morning, after the British bookmaker <a href="http://www.investegate.co.uk/ladbrokes-plc--lad-/rns/statement-re--press-comment/201506230700088944Q/">confirmed it is in talks with gambling and gaming group Gala Coral about a merger</a>.</p>
<p>Shares have opened up over 10% this morning on news of the talks, hitting a 9-month high.</p>
<p><img src="http://static2.businessinsider.com/image/5589131bdd089547788b4625-709-378/ladbrokes.jpg" border="0" alt="Ladbrokes shares"></p>
<p>Jim Mullen, CEO Ladbrokes, said: "A merger with Gala Coral could create a combined business with significant scale and has the potential to generate substantial cost synergies, creating value for both companies' shareholders."</p>
<p>Gala Coral operates betting shops, bingo halls, and casinos.</p><p><a href="http://www.businessinsider.com/ladbrokes-shares-jump-10-merger-talks-gala-coral-2015-6#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="http://www.businessinsider.com/scientifically-ways-women-attractive-2015-5">6 scientifically proven features men find attractive in women</a></p> http://www.businessinsider.com/bookies-are-taking-bets-on-who-could-be-new-hosts-of-the-2018-and-2022-world-cups-2015-5Bookies are taking bets on who could be new hosts of the 2018 and 2022 World Cupshttp://www.businessinsider.com/bookies-are-taking-bets-on-who-could-be-new-hosts-of-the-2018-and-2022-world-cups-2015-5
Wed, 27 May 2015 13:45:26 -0400Shane Dixon Kavanaugh
<p><img style="float:right;" src="http://static3.businessinsider.com/image/5565ffadeab8ea6a2ae30450-1200-924/betting-gambling-top-hat-wealthy-rich-5.jpg" border="0" alt="betting gambling top hat wealthy rich"></p><p></p>
<p>FIFA officials&nbsp;<a href="http://www.businessinsider.com/world-cup-2018-in-russia-and-qatar-2022-will-still-go-ahead-2015-5" target="_blank">insist</a>&nbsp;that Russia and Qatar will still hold the next two World Cups, despite&nbsp;<a href="http://www.nydailynews.com/sports/soccer/fifa-officials-arrested-bad-news-sepp-blatter-article-1.2236802" target="_blank">new allegations</a> that executives for the powerful soccer association received bribes in exchange for granting hosting rights to those countries.</p>
<p>But that hasn’t&nbsp;<a href="http://www.paddypower.com/football?action=go_fb_type&amp;ev_type_id=25411&amp;ev_oc_grp_ids=2072848" target="_blank">stopped bookmakers from speculating</a>&nbsp;about which nations could nab&nbsp;the tournament rights&nbsp;if&nbsp;an investigation into FIFA turns up more dirt on the bidding process.&nbsp;</p>
<p>Irish bookmaker Paddy Power made England the 11/10 favorite to host the 2018 World Cup, should Russia lose the right to do so. Spain and Portugal come in second place with 5/4 odds, followed by the Netherlands and Belgium, which are both 9/2 favorites.</p>
<p>The field of potential replacements widens beyond Europe for the 2022 World Cup. Should Qatar lose its hosting rights, the United States&nbsp;is the 5/4 favorite to take over the tournament, according to Paddy Power.</p>
<p>Other top contenders include Australia (7/4), South Korea (11/2) and Japan (13/2). The bookmaker is also placing on odds on who the&nbsp;<a href="http://www.paddypower.com/football?action=go_fb_type&amp;ev_type_id=25411&amp;ev_oc_grp_ids=1991378" target="_blank">next FIFA president will be</a>&nbsp;and how many of soccer executives arrested on Tuesday&nbsp;<a href="http://www.paddypower.com/football?action=go_fb_type&amp;ev_type_id=25411&amp;ev_oc_grp_ids=2072849" target="_blank">will go to jail</a>.</p>
<p>British gaming company Ladbrokes also made the U.S. and Australia the odds-on favorites to replace Qatar in 2022, The Independent reported. Currently, however, the bookmaker still gives Qatar 1/6 odds of holding&nbsp;on to the hosting rights.</p>
<div></div><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/russia-is-not-a-fan-of-the-huge-us-bust-of-fifa-officials-2015-5" >Russia is not a fan of the huge US bust of FIFA officials</a></strong></p>
<p><a href="http://www.businessinsider.com/bookies-are-taking-bets-on-who-could-be-new-hosts-of-the-2018-and-2022-world-cups-2015-5#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="http://www.businessinsider.com/freakonomics-sneak-peek-soccer-2014-5">Why Soccer Players Ignore The Best Odds When It Comes To Penalty Kicks</a></p> http://www.businessinsider.com/people-london-betting-royal-baby-names-prince-william-kate-middleton-2015-4Betting odds predict the most popular names for Prince William and Kate's new babyhttp://www.businessinsider.com/people-london-betting-royal-baby-names-prince-william-kate-middleton-2015-4
Fri, 24 Apr 2015 12:58:00 -0400Jason Gaines and Associated Press
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<p>Paddy Power Bookmakers, a company that specializes in online betting on sports and politics, is now taking bets on the name of Prince William and Kate Middleton's new baby. The baby is due any day now.</p>
<p><em>Produced by Jason Gaines. Video courtesy of Associated Press.</em></p>
<p><strong>Follow BI Video:</strong> <a href="https://www.facebook.com/BusinessInsider.Video">On Facebook</a></p><p><a href="http://www.businessinsider.com/people-london-betting-royal-baby-names-prince-william-kate-middleton-2015-4#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/how-to-best-odds-win-craps-gambling-casino-2015-4It's easy to fake it at the craps table if you know these two betshttp://www.businessinsider.com/how-to-best-odds-win-craps-gambling-casino-2015-4
Thu, 16 Apr 2015 16:09:00 -0400Sara Silverstein and Sam Rega
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<p>Craps can seem intimidating but it really isn’t that hard to play. In fact, you only need to understand a few bets to get great odds and play like a pro.</p>
<p><em>Produced by <a href="http://www.businessinsider.com/author/sara-silverstein" target="_blank">Sara Silverstein</a> and <a href="http://www.businessinsider.com/author/sam-rega" target="_blank">Sam Rega</a><br></em></p>
<p><strong>Follow BI Video: </strong><a href="https://www.facebook.com/BusinessInsider.Video">On Facebook</a></p><p><a href="http://www.businessinsider.com/how-to-best-odds-win-craps-gambling-casino-2015-4#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/nate-silver-march-madness-bracket-ncaa-college-basketball-gambling-2015-3This is how Nate Silver fills out his March Madness brackethttp://www.businessinsider.com/nate-silver-march-madness-bracket-ncaa-college-basketball-gambling-2015-3
Sun, 15 Mar 2015 09:58:00 -0400Graham Flanagan
<p><a href="http://www.businessinsider.com/nate-silver-march-madness-bracket-ncaa-college-basketball-gambling-2015-3"><strong>Click for the story &gt;</strong></a></p><p><a href="http://www.businessinsider.com/nate-silver-march-madness-bracket-ncaa-college-basketball-gambling-2015-3#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/super-bowl-squares-odds-of-winning-2015-1Here's how to figure out the odds of winning your Super Bowl office poolhttp://www.businessinsider.com/super-bowl-squares-odds-of-winning-2015-1
Sat, 31 Jan 2015 09:52:00 -0500Sara Silverstein and Matt Johnston
<p>Super Bowl Squares is one of the most popular ways for Americans to bet on the Super Bowl. It's played on a 10 by 10 grid of squares, which people buy for a fixed price. Each square is assigned two numbers that aim to match the score of the Super Bowl. To get you ready, we crunched the numbers -- more than 14,000 games -- to see which numbers have the best odds of winning.</p>
<p><em>Produced by Sara Silverstein and Matt Johnston</em></p>
<p><strong>Follow BI Video: <a href="https://www.facebook.com/BusinessInsider.Video">On Facebook</a></strong></p><p><a href="http://www.businessinsider.com/super-bowl-squares-odds-of-winning-2015-1#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/8-people-win-huge-bet-germany-world-cup-2014-7A Few People Bet Germany Would Beat Brazil 7 To 1 And Ended Up Winning $11,000http://www.businessinsider.com/8-people-win-huge-bet-germany-world-cup-2014-7
Wed, 09 Jul 2014 20:04:00 -0400Shirley Li
<p><span style="line-height: 1.5em;"><img style="float:right;" src="http://static3.businessinsider.com/image/53bdd3026da811fa319dd02b-995-746/fred-brazil-world-cup-3.jpg" border="0" alt="fred brazil world cup" />The worst defeat in World Cup history meant windfalls for a few wild gamblers. Germany's semifinal massacre&nbsp;</span><a href="http://www.thewire.com/entertainment/2014/07/this-kid-crying-epitomizes-brazils-heartbreakingly-inevitable-defeat/374120/">left Brazil stunned</a><span style="line-height: 1.5em;">, but also forced a&nbsp;few bookmakers to pay out some outrageous winners.</span></p>
<p><span style="line-height: 1.5em;">The&nbsp;</span><span style="line-height: 1.5em;">popular&nbsp;online betting exchange Betfair, which allows any user to establish their own wagers, had only one person offering a bet on that exact score... at 999-to-1 odds.</span></p>
<blockquote class="twitter-tweet" lang="en">
<p>Full Time: <a href="https://twitter.com/hashtag/BRA?src=hash">#BRA</a> 1-7 <a href="https://twitter.com/hashtag/GER?src=hash">#GER</a>. The 1-7 Correct Score was matched at 999/1 for &pound;13!</p>
&mdash; Betfair Exchange (@BetfairSports) <a href="https://twitter.com/BetfairSports/statuses/486628111875063809">July 8, 2014</a></blockquote>
<p>In total, a confirmed&nbsp;eight "punters" made a bet&nbsp;that Germany would score seven goals to Brazil's measly one.&nbsp;<a href="http://blog.paddypower.com/2014/07/08/world-cup-punting-hall-of-fame-plucking-out-a-5001-winner-from-the-madness-that-was-germany-7-1-brazil/?area=blog_homepage_topstories&amp;button=world-cup-punting-hall-of-fame-plucking-out-a-5001-winner-from-the-madness-that-was-germany-7-1-brazil">Paddy Power</a>&nbsp;had four people who placed the wager, with one Essex better placing&nbsp;<span>&pound;5 on the score and walking away with&nbsp;&pound;2,505. Australia betting site TAB&nbsp;<a href="http://www.independent.co.uk/sport/football/worldcup/brazil-vs-germany-2014-world-cup-punter-in-new-zealand-bet-on-17-scoreline-9594504.html">reported one gambler earning $500 for his correct prediction</a>. And finally, back&nbsp;</span>at England-based Betfair, spokesman Barry Orr said&nbsp;three winners wagered a total of $11 and cashed out a whopping $11,000.&nbsp;</p>
<p>"The guys I feel sorry for are the punters who had 31 pounds [$53 U.S.] at 999-1 on 7-0 Germany," Orr&nbsp;<a href="http://www.espnfc.us/fifa-world-cup/story/1940814/bettors-cash-in-on-999-to-1-bet-on-germany-to-win-7-1">told&nbsp;</a><em><a href="http://www.espnfc.us/fifa-world-cup/story/1940814/bettors-cash-in-on-999-to-1-bet-on-germany-to-win-7-1">ESPN</a></em>.</p>
<p>Even more impressive: These betters managed to predict the wildest outcome (<a href="http://fivethirtyeight.com/datalab/the-most-shocking-result-in-world-cup-history/">from a statistical standpoint</a>)&nbsp;in World Cup history.&nbsp;Eight people is almost enough to make a soccer team. FIFA should just give the Cup to them for winning big.</p>
<script async="" src="//platform.twitter.com/widgets.js" charset="utf-8" type="text/javascript"></script><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/axelle-despiegelaere-gets-modeling-contract-after-viral-world-cup-photo-2014-7" >17-Year-Old World Cup Fan Gets Modeling Deal With L'Oreal After Photos Go Viral</a></strong></p>
<p><a href="http://www.businessinsider.com/8-people-win-huge-bet-germany-world-cup-2014-7#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/the-9-worst-mental-mistakes-poker-players-make-2014-6The 9 Worst Mental Mistakes Poker Players Makehttp://www.businessinsider.com/the-9-worst-mental-mistakes-poker-players-make-2014-6
Tue, 01 Jul 2014 12:41:57 -0400Elena Holodny
<p><img style="float:right;" src="http://static3.businessinsider.com/image/51e57bf4ecad040917000001-1200-924/poker-chip-pull.jpg" border="0" alt="poker chip pull" /></p><p>Any athlete in any sport can tell you that 50% of the game is mental. Poker is no different. In fact, the mental aspect of poker is the most crucial part of the game because you need to know how to handle short term gains and short term losses in order to stay focused until the end.&nbsp;</p>
<p>Bumps in the road will happen. What matters is what you choose to do when you come across the challenging moments. And to be able to make the best choices and to strengthen your poker game, you need to know how to avoid getting stuck in mental pitfalls.</p>
<p><strong>1. Stop thinking in terms of absolute values</strong><br />Poker is a game of relative values. That means that you don't need a monster hand to win, you just need a hand that is better than your opponent's. Similarly, even if you have a monster hand, it doesn't mean that you're going to win... Your hand might look better, but your opponent's might do better once the flop comes.<br />Don't believe that? In the 2009 WSOP, Joe Cada's <a href="http://www.lasvegassun.com/news/2009/nov/10/life-goes-moon/">winning hand </a>was two 9's. He beat Darvin Moon who had queen-jack.</p>
<p><strong>2. Don't play every single hand<br /></strong>New players sometimes feel like they need to play every single hand. This happens for several reasons, including wanting to be part of the action, not wanting to give away a bad hand, and wanting to impress other players. Unfortunately, you will not do well if you play to impress others because then you are not focusing on the game. Worrying too much about impressing others is a distraction.<br /><br /><strong>3. Failing to study your opponent<br /></strong>You can't completely ignore other people. You need to be aware of how your own habits betray what cards you might be holding. You must also be able to analyze other players and their playing styles in order to see what their tells are. If you can't pick up on your opponent's mental mistakes and you can't decipher any of their habits, you should find easier opponents. (Think of it this way: if you can't reach a basketball hoop, don't challenge <a href="http://www.youtube.com/watch?v=ECUpoMWYUWo">John Wall</a>&nbsp;to a slam dunk contest.) Understanding how other players think and behave is so critical to the game of poker that some professional poker players have an ex-<a href="http://www.navarropoker.com/">FBI agent</a>&nbsp;train them in recognizing non-verbal communication.<br /><br /><strong>4. Not wanting to "give up"<br /></strong>Of course, giving up is bad. But in poker, sometimes a good player needs to recognize when it is the correct decision to fold instead of waiting for a lucky strike. That's just how the game works. A lot of novice players get too caught up in waiting for cards in the flop. For example, a person might have 3 cards that could lead to a flush. Instead of actually considering the pot odds and probabilities, he will cling to the dream of seeing two more cards in the flop that will complete his flush. This might never happen, and by then the player might have unnecessarily wasted a fair amount of money. Not "giving up" has seriously negative consequences because the player is relying on short-term emotions, rather than investing in the long-term of the game.<br /><br /><strong>5. Not knowing any math<br /></strong>A huge part of poker is knowing how to correctly size bets and understanding pot odds and implied pot odds. If you can master this, then you will have a better sense for when it is best to fold and when it is best to keep playing. A lot of new players don&rsquo;t take the time to learn the probabilities. Instead, they play the extremes by betting too much when their cards excite them, and by betting too little when their cards disappoint them. Ideally, a player should not get caught up in these emotions, but should analyze the situation and proceed to make choices that maximize potential winnings and minimize potential losses.&nbsp;<strong><br /></strong></p>
<p><strong>6. Bluffing too much</strong><br /> Some people really get into bluffing because it's exciting &mdash; and it's incredibly enjoyable to bluff successfully. The downside of this behaviour is that your bluffs no longer become believable after a while. In other words, your playing strategy will be very easy to read for the duration of the game.&nbsp;</p>
<p><strong>7. Cold calling raises</strong><br /> Cold calling is when a player calls more than one player's raise at once. Opponent A will raise, then opponent B will re-raise, and then you call. This play indicates that you are either a timid or an undisciplined player &mdash; or both. If you do not feel comfortable enough to re-raise after opponent B re-raised, then you should probably fold.&nbsp;</p>
<p><strong>8. Being afraid to make mistakes</strong><strong><br /> </strong>Some players are too afraid to play until they know "for sure" that their hand will win. If they are uncertain of the round's outcome, they fold. The problem with this strategy is that people who do this assume that other players play the same way. Often times, when a timid player sees someone playing aggressively, he automatically assumes that the aggression is a sign of good cards. And then, he folds, even though the other player might have been bluffing.</p>
<p>And finally...<br /> <br /> <strong>9. Using your cards as an excuse</strong><br /> This is the most important rule in any poker game. People use &ldquo;bad cards&rdquo; as a scapegoat constantly, but it&rsquo;s not a legitimate excuse. Even the greatest poker players get terrible cards, yet they still end up at the final table.</p>
<p>You're not going to win every single round &mdash; accept that and move on. The trick is to recognize profitable opportunities in the game. You don't have control over the good or bad cards that you are dealt, but you do have control over making the best of your situation and finding the good opportunities. And that's how you win.</p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/how-to-talk-like-a-poker-pro-2014-6" >How To Talk Like A Poker Pro</a></strong></p>
<p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/blackjack-basics-2014-6" >12 Things Everyone Should Know Before Stepping Up To A Blackjack Table</a></strong></p>
<p><a href="http://www.businessinsider.com/the-9-worst-mental-mistakes-poker-players-make-2014-6#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/lucky-streaks-happen-in-gambling--but-they-arent-the-result-of-luck-2014-5Lucky Streaks Happen In Gambling — But They Aren't The Result Of Luckhttp://www.businessinsider.com/lucky-streaks-happen-in-gambling--but-they-arent-the-result-of-luck-2014-5
Fri, 09 May 2014 15:39:00 -0400The Economist
<p><span style="line-height: 1.5em;"><img style="float:right;" src="http://static2.businessinsider.com/image/51632ed26bb3f71c50000014-480-/screen%20shot%202013-04-08%20at%204.54.46%20pm.png" border="0" alt="poker royal flush gambling" width="480" />Gamblers, by definition, are optimists. They can win only by beating the odds, and--over the long term--the odds cannot be beaten. </span></p>
<p><span style="line-height: 1.5em;">But what about the short term? Many gamblers believe winning streaks, known as "hot hands", are real, and that if they are in such a streak it makes sense to keep on betting. </span></p>
<p><span style="line-height: 1.5em;">Conversely, many also believe bad luck is sure to reverse itself not merely by reverting to the mean, as a statistician would predict, but to the extent that the gambler will recoup his losses. This is known as the gambler's fallacy.</span></p>
<p>Non-gamblers might reasonably assume both approaches to be equally fantastical. But research by Juemin Xu and Nigel Harvey at University College, London, just published in Cognition, has shown that in some areas of gambling hot hands do actually exist.</p>
<p>Conversely, and just as oddly, they found that in these same areas the gambler's fallacy is yet more fallacious than a statistician would predict. Punters who continue to punt after losing do not even manage to revert to the mean.</p>
<p>Using the power of the internet to round up a huge sample, the two researchers examined 565,915 bets made by 776 people on sports such as horse-racing and football. Because these were online bets their timing could be established precisely. Ms Xu and Dr Harvey looked at winning and losing streaks up to six bets long.</p>
<p>The probability of a first bet winning was 48% and that of a follow-up winning again was 49%. After that, the streak took off. The third bet won 57% of the time. The fourth, if the third had won, won 67% of the time, the fifth, 72% of it and the sixth 75%. As for the losers, after ploughing their first bets, their success with their second slipped to 47% and thence held at 45%.</p>
<p>The explanation of the puzzle, Ms Xu and Dr Harvey found, was not that Lady Luck actually does smile on winners and frown on losers. Rather, as winners' winning streaks increased in length they started choosing safer and safer odds, which led them to win more often, though less profitably. In contrast, those who had experienced a losing streak went for ever riskier bets, making it more likely the streak would continue.</p>
<p>Hot hands, then, are real. But they are created by a gambler's behaviour rather than by fortune's wheel. The gambler's fallacy, though, is made worse by his behaviour. The moral is to believe in maths, not luck, and probably not to bother betting in the first place.</p>
<p>Click <a href="https://subscriptions.economist.com/nwcd">here</a> to subscribe to The Economist.<img class="nc_pixel" src="https://pixel.newscred.com/px.gif?key=YXJ0aWNsZT1lM2U1M2RiOTg0NDlhYjZlOGE5ZDkyMjIwMTY0NGVkZiZub25jZT0xMzY4NzIxZS04YWE0LTQzNWUtODkxNS05NDM5YWJkYjk4NzgmcHVibGlzaGVyPThjMDBmYmVlNjFkNWJjZjBjNjA5MmQ4YjkyZWJiY2Ex" border="0" alt="" width="1" height="1" style="line-height: 1.5em;" /></p><p><a href="http://www.businessinsider.com/lucky-streaks-happen-in-gambling--but-they-arent-the-result-of-luck-2014-5#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/games-with-the-best-odds-in-las-vegas-2014-4CHARTS: Stick To These Games If You Don't Want To Lose Your Shirt In Las Vegashttp://www.businessinsider.com/games-with-the-best-odds-in-las-vegas-2014-4
Thu, 10 Apr 2014 15:32:00 -0400Megan Willett
<p class="p1"><img src="http://static3.businessinsider.com/image/5346bf0969beddcb24c62da4-1200-1500/tumblr_n3be1a6fax1s3dn7vo1_1280.png" border="0" alt="las vegas games best odds" /></p><p>The odds are always against you when you&rsquo;re betting in Las Vegas, but some games win the house more money than others.</p>
<p class="p1"><span style="font-size: 15px; line-height: 1.5em;">Passionate data finder and friend-of-the-site Seth Kadish has made two charts based on one year of Las Vegas gaming data, <a href="http://vizual-statistix.tumblr.com/post/81310472772/for-those-heading-to-las-vegas-hoping-to-win-vast" target="_blank">first published on his excellent blog, Vizual&nbsp;Statistix</a>. The weekly average values were derived from one year of data for all non-restricted locations in the Las Vegas Strip area <a href="http://gaming.nv.gov/index.aspx?page=149" target="_blank">via the Nevada State Gaming Control Board Gaming Commission</a>.</span><a href="http://gaming.nv.gov/index.aspx?page=149"><br /></a></p>
<p class="p3"><span style="font-size: 15px; line-height: 1.5em;">Kadish found that people lost the most money at table games, in particular 3-card poker, where gamblers lost an average of 32.5% of their bets.</span></p>
<p class="p3"><span style="font-size: 15px; line-height: 1.5em;">If you do want to head to the tables, bingo (where the house only takes 8.8% of wagers) and blackjack (11.1%) are your safest choices.</span></p>
<p class="p3"><span style="font-size: 15px; line-height: 1.5em;">Your best bet entirely for losing the least money are the slot machines, particularly $100 dollar slots where the house only takes 3.6%, followed by the $25 dollar and $5 dollar slots.&nbsp;</span></p>
<p class="p3"><span style="font-size: 15px; line-height: 1.5em;">Sports betting is pretty safe as well. Betting on baseball will give you slightly better odds than basketball or football, but sports parlay cards are super risky with gamblers losing almost 40% of their money.</span></p>
<p class="p3"><span style="font-size: 15px; line-height: 1.5em;">So the next time you&rsquo;re in Vegas, remember where the smart money is and stick to the games closest to the X-axis.</span></p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/las-vegas-food-scene-2014-4" >Don't Go To Las Vegas To Gamble And Party — Go For The Food</a></strong></p>
<p><a href="http://www.businessinsider.com/games-with-the-best-odds-in-las-vegas-2014-4#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/odds-winning-super-bowl-pool-squares-2014-1We Analyzed 14,934 NFL Games To Figure Out The Best Super Bowl Squareshttp://www.businessinsider.com/odds-winning-super-bowl-pool-squares-2014-1
Thu, 30 Jan 2014 12:12:00 -0500Sara Silverstein and Matt Johnston
<p><a href="http://www.businessinsider.com/odds-winning-super-bowl-pool-squares-2014-1"><strong>Click here to see the original story &gt;</strong></a></p><p><a href="http://www.businessinsider.com/odds-winning-super-bowl-pool-squares-2014-1#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/odds-winning-super-bowl-pool-squares-2014-1How To Figure Out The Odds Of Winning Your Super Bowl Office Poolhttp://www.businessinsider.com/odds-winning-super-bowl-pool-squares-2014-1
Fri, 24 Jan 2014 13:05:00 -0500Sara Silverstein and Matt Johnston
<p>Super Bowl Squares is one of the most popular ways for Americans to bet on the Super Bowl. It's played on a 10 by 10 grid of squares, which people buy for a fixed price. Each square is assigned two numbers that aim to match the score of the Super Bowl. To get you ready, we crunched the numbers -- more than 14,000 games -- to see which numbers have the best odds of winning.</p>
<p><em>Produced by Sara Silverstein and Matt Johnston.&nbsp;</em></p>
<p><strong>Follow BI Video: <a href="https://www.facebook.com/BusinessInsider.Video">On Facebook</a></strong></p><p><strong>NOW WATCH:&nbsp;<a href="http://www.businessinsider.com/nfl-players-selling-most-jerseys-2014-1" >You Won't Believe Which NFL Player is Selling The Most Jerseys</a></strong></p>
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<p><a href="http://www.businessinsider.com/odds-winning-super-bowl-pool-squares-2014-1#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/super-bowl-novelty-bets-2014-1The 17 Craziest Prop Bets You Can Make On The Super Bowlhttp://www.businessinsider.com/super-bowl-novelty-bets-2014-1
Thu, 23 Jan 2014 15:10:00 -0500Steven Perlberg
<p><img style="float:right;" src="http://static3.businessinsider.com/image/52e167c8eab8ea014b5bb2ba-480-/richard-sherman-championship-3.jpg" border="0" alt="Richard Sherman Championship" width="480" /></p><p>Novelty bettors love the Super Bowl, with some of the more famous wagers placed on things like the coin toss.</p>
<p>But this year's Super Bowl &mdash; featuring the Seattle Seahawks and the Denver Broncos &mdash; has an even more awesome list of things you can bet that are ancillary to the game itself.</p>
<p><span>Unsurprisingly, a few of the bets involve Richard Sherman, who started a&nbsp;</span><a href="http://www.businessinsider.com/richard-sherman-thug-2014-1">media frenzy</a><span>&nbsp;with a&nbsp;</span><a href="http://www.businessinsider.com/video-richard-sherman-erin-andrews-interview-2014-1">wild post-game interview</a><span>&nbsp;in the NFC championship.</span></p>
<p>The oddsmakers at <a href="http://www.bovada.lv/">Bovada</a> have over 500 novelty bets (or "props") for the Super Bowl. These are some of our favorites, with the "+/-"&nbsp;betting line (how much you win or lose if you bet $100) and the odds.&nbsp;</p>
<p><strong>1. Will it snow during the game?&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<span style="text-decoration: underline;"></span><span style="text-decoration: underline;"></span></strong></p>
<p>Yes +300 (3/1)<span style="text-decoration: underline;"></span><span style="text-decoration: underline;"></span></p>
<p>No -500 (1/5)</p>
<p><strong style="line-height: 1.5em;">2. What will be the temperature at Kickoff? &nbsp; &nbsp;</strong></p>
<p>Over/under: 34 degrees Fahrenheit</p>
<p><span style="text-decoration: underline;"></span><strong style="line-height: 1.5em;">3. What will be the lowest temperature during the game? &nbsp; &nbsp; &nbsp;</strong></p>
<p>Over/under: 31 degrees Fahrenheit</p>
<p><strong style="line-height: 1.5em;">4. Will the <a href="http://www.businessinsider.com/power-goes-out-at-super-bowl-2013-2">power go out</a> in the stadium during the game? &nbsp; &nbsp;&nbsp;</strong></p>
<p>Yes (25/1)</p>
<p><strong style="line-height: 1.5em;">5. Will Renee Fleming forget or omit at least 1 word of the official US National Anthem? &nbsp; &nbsp; &nbsp; &nbsp;&nbsp;</strong></p>
<p>Yes +250 (5/2)<span style="text-decoration: underline;"></span><span style="text-decoration: underline;"></span></p>
<p>No -400 (1/4)<span style="line-height: 1.5em;">&nbsp;</span></p>
<p><strong style="line-height: 1.5em;">6. Will Renee Fleming wear gloves when she starts singing the US National Anthem? &nbsp; &nbsp; &nbsp; &nbsp;&nbsp;</strong></p>
<p>Yes (1/2)<span style="text-decoration: underline;"></span><span style="text-decoration: underline;"></span></p>
<p>No (3/2)<span style="line-height: 1.5em;">&nbsp;</span></p>
<p><span style="text-decoration: underline;"></span><strong style="line-height: 1.5em;">7. Will <a href="http://www.businessinsider.com/the-15-best-gifs-from-nfl-week-13-2013-12">Knowshon Moreno cry</a> during the singing of the National Anthem?</strong></p>
<p>Yes +400 (4/1)<span style="text-decoration: underline;"></span><span style="text-decoration: underline;"></span></p>
<p>No -700 (1/7)<span style="line-height: 1.5em;">&nbsp;</span></p>
<p><strong>8. How many times will <a href="http://www.businessinsider.com/peyton-manning-omaha-explanation-2014-1">Peyton Manning say "Omaha"</a> during the game?&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<span style="text-decoration: underline;"></span><span style="text-decoration: underline;"></span></strong></p>
<p>Over/Under (27&frac12;)</p>
<p><span style="text-decoration: underline;"></span><strong style="line-height: 1.5em;">9. Will Michael Crabtree mention Richard Sherman in a tweet during the Super Bowl from kickoff until final whistle? &nbsp;</strong></p>
<p>Yes +150 (3/2)<span style="text-decoration: underline;"></span><span style="text-decoration: underline;"></span></p>
<p>No -200 (1/2)</p>
<p><strong style="line-height: 1.5em;">10. Will the announcers say the word "Marijuana" during the game? &nbsp;&nbsp;</strong></p>
<p>Yes +550 (11/2)<span style="text-decoration: underline;"></span><span style="text-decoration: underline;"></span></p>
<p>No -900 (1/9)</p>
<p><strong style="line-height: 1.5em;">11. What will Bruno Mars be wearing on his head at the start of his Half Time performance? &nbsp;</strong></p>
<p>Fedora (2/3)<span style="text-decoration: underline;"></span><span style="text-decoration: underline;"></span></p>
<p>No hat (2/1)<span style="text-decoration: underline;"></span></p>
<p>Fur Hat (5/1)<span style="text-decoration: underline;"></span></p>
<p>Tuque (8/1)<span style="line-height: 1.5em;">&nbsp;</span></p>
<p><span style="text-decoration: underline;"></span><strong style="line-height: 1.5em;">12. What Color will the Gatorade (or liquid) be that is dumped on the Head Coach of the Winning Super Bowl Team? &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</strong></p>
<p>Clear/Water (2/1) &nbsp; &nbsp;&nbsp;<span style="text-decoration: underline;"></span><span style="text-decoration: underline;"></span></p>
<p>Orange (3/1) &nbsp; &nbsp;<span style="text-decoration: underline;"></span><span style="text-decoration: underline;"></span></p>
<p>Yellow (3/1) &nbsp; &nbsp;&nbsp;<span style="text-decoration: underline;"></span><span style="text-decoration: underline;"></span></p>
<p>Red (5/1) &nbsp; &nbsp; &nbsp;&nbsp;<span style="text-decoration: underline;"></span><span style="text-decoration: underline;"></span></p>
<p>Blue (7/1) &nbsp;<span style="text-decoration: underline;"></span><span style="text-decoration: underline;"></span></p>
<p>Green (10/1)</p>
<p><strong>13. Will Richard Sherman receive a taunting penalty in the game?</strong></p>
<p><span style="line-height: 1.5em;">Yes +400 (4/1)</span></p>
<p>No -700 (1/7)</p>
<p><span style="text-decoration: underline;"></span><strong style="line-height: 1.5em;">14. Will Richard Sherman receive an unnecessary roughness penalty in the game? &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;&nbsp;</strong></p>
<p>Yes +550 (11/2)<span style="text-decoration: underline;"></span><span style="text-decoration: underline;"></span></p>
<p>No -900 (1/9)</p>
<p><span style="text-decoration: underline;"></span><strong style="line-height: 1.5em;">15. Will Richard Sherman receive a pass interference penalty in the game? &nbsp; &nbsp;</strong></p>
<p>Yes +150 (3/2)<span style="text-decoration: underline;"></span><span style="text-decoration: underline;"></span></p>
<p>No -200 (1/2)</p>
<p><strong>16. Will Richard Sherman (SEA) record an interception?</strong>&nbsp;&nbsp;<span style="text-decoration: underline;"></span><span style="text-decoration: underline;"></span></p>
<p>Yes +200 (2/1)<span style="text-decoration: underline;"></span><span style="text-decoration: underline;"></span></p>
<p>No -260 (5/13)</p>
<p><strong style="line-height: 1.5em;">17. What will be higher? &nbsp;&nbsp;</strong></p>
<p>Gold Medals by the USA in the 2014 Sochi Olympics +120 (6/5)<span style="text-decoration: underline;"></span><span style="text-decoration: underline;"></span></p>
<p>First Half Total Points by the Broncos -150 (2/3)</p><p><strong>MORE:&nbsp;<a href="http://www.businessinsider.com/richard-sherman-things-you-never-knew-2014-1" >17 Things You Never Knew About Richard Sherman</a></strong></p>
<p><a href="http://www.businessinsider.com/super-bowl-novelty-bets-2014-1#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/cantor-fitzgerald-betting-investigation-2013-10REPORT: Cantor Fitzgerald's Sports-Betting Affiliate Is Under Investigation For Money Launderinghttp://www.businessinsider.com/cantor-fitzgerald-betting-investigation-2013-10
Mon, 28 Oct 2013 16:55:48 -0400Steven Perlberg
<p><span style="line-height: 1.5em;"><img style="float:right;" src="http://static1.businessinsider.com/image/526ecd2fecad04dd7e2377ff-480-/betting-gambling-top-hat-wealthy-rich-2.jpg" border="0" alt="betting gambling top hat wealthy rich" width="480" />The sports-betting affiliate of Cantor Fitzgerald </span><a href="http://online.wsj.com/news/articles/SB10001424052702304200804579163901926087202?mod=djemalertMARKET">is under investigation for money laundering</a><span style="line-height: 1.5em;">, sources tell the Wall Street Journal's Alexandra Berzon and Michael Rothfeld.</span></p>
<div class="connect byline-dsk">
<div class="social-dd">
<p>While Michael Colbert, the former chief bookmaker of Cantor Gaming, pleaded guilty in August to fraud conspiracy, the Journal reports that a federal investigation is looking further up the chain at whether Colbert's boss had a role in accepting illegal sports bets. <a href="http://online.wsj.com/news/articles/SB10001424052702304200804579163901926087202?mod=djemalertMARKET">From the report</a>:</p>
<p style="padding-left: 30px;"><span style="line-height: 1.5em;">Investigators at multiple government agencies are also examining whether Cantor Gaming personnel allowed the laundering of millions of dollars of illegal gambling money flowing through its accounts, people familiar with the probes said. They described investigators as focused in part on whether Cantor accepted deposits it shouldn't have and failed to report suspicious transactions to the government.</span></p>
</div>
</div>
<p><span style="line-height: 1.5em;"><span>A spokesman for parent Cantor Fitzgerald said that "the company knows of no wrongdoing other than by Mr. Colbert."</span></span></p>
<p>Nevertheless, about a half dozen agencies &mdash; like the Treasury Departments Financial Crimes Enforcement Network and the IRS &mdash; are reportedly probing the company, the Journal reports.</p>
<p><a href="http://online.wsj.com/news/articles/SB10001424052702304200804579163901926087202?mod=djemalertMARKET">Read the full report at the Wall Street Journal&nbsp;&raquo;</a></p><p><a href="http://www.businessinsider.com/cantor-fitzgerald-betting-investigation-2013-10#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/7-weirdest-things-you-can-bet-on-2013-7Aside From The Royal Baby's First Word, Here Are 7 More Weird Bets You Can Make Right Nowhttp://www.businessinsider.com/7-weirdest-things-you-can-bet-on-2013-7
Mon, 22 Jul 2013 16:02:00 -0400Steven Perlberg
<p><span style="line-height: 1.5em;"><img style="float:right;" src="http://static5.businessinsider.com/image/51ed843869bedde564000022-480-/very-british-guy-uk-britain-flag-suit.png" border="0" alt="very british guy uk britain flag suit" width="480" />The world is flipping out over the new royal baby boy, with gutsy bettors still&nbsp;<a href="http://www.businessinsider.com/what-will-the-royal-babys-name-be-2013-7">gambling on the future heir's name</a>.</span></p>
<p>The Irish betting site <a href="http://www.paddypower.com/bet">Paddy Power</a> gave out&nbsp;<a href="http://www.paddypower.com/bet/novelty-bets/royal-specials?ev_oc_grp_ids=512041">500:1 odds on Fergie</a>. The risk, it seems, did not pay off for Team Fergie.</p>
<p>But you&nbsp;<a href="http://www.paddypower.com/bet/novelty-betting/novelty-bets/royal-specials">can also bet on</a>&nbsp;the prince's&nbsp;first word, university, career, first overseas visit, and even the age at which the young royal is first photographed at a nightclub.</p>
<p>While sports betting remains Paddy Power's bread and butter, the site offers a range of these kinds of "novelty" bets.</p>
<p>So here are the 7 strangest non-royal baby things you can bet on right now (and their odds).</p>
<p><strong>1. Will Obama close Guantanamo Bay?</strong></p>
<p>Yes (9/4)</p>
<p>No (2,7)</p>
<p><strong>2. The first to leave the band One Direction.</strong></p>
<p>Liam Payne (7/4)</p>
<p>Harry Styles (5/2)</p>
<p>Niall Horan (7/2)</p>
<p>Zayn Malik (7/2)</p>
<p>Louis Tomlinson (6/1)</p>
<p><strong>3. Will the next James Bond be black?</strong></p>
<p>Yes (4/1)</p>
<p>No (1/7)</p>
<p><strong>4. When will alien life be proven?</strong></p>
<p>2013 (25/1)</p>
<p>2014 (80/1)</p>
<p>2015 (100/1)</p>
<p>2016 (100/1)</p>
<p>2017 (100/1)</p>
<p>2018 (100/1)</p>
<p><strong>5. How will Julian Assange leave the Ecuadorian embassy in London?</strong></p>
<p><span>UK police car (11/10)</span></p>
<p><span>Ecuadorian state car (7/4)</span></p>
<p><span>Helicopter (7/1)</span></p>
<p><span>Diplomatic bag (20/1)</span></p>
<p><span>Laundry van (100/1)</span></p>
<p><span>Hot air balloon (150/1)</span></p>
<p><span>Tunnel (200/1)</span></p>
<p><span>Jet pack (500/1)</span></p>
<p><strong>6. Who will play Edward Snowden in the film? (top 5)</strong></p>
<p><span>Jake Gyllenhaal (10/1)</span></p>
<p><span>Ed Norton (12/1)</span></p>
<p><span>Ryan Gosling (16/1)</span></p>
<p><span>Sam Worthington (20/1)</span></p>
<p><span>Jeremy Renner (20/1)</span></p>
<p><strong>7. Will 2013 be a White Christmas?</strong></p>
<p><span>Chicago (5/6)</span></p>
<p><span>New York (2/1)</span></p>
<p>London (4/1)</p>
<p>Paris (10/1)</p>
<p>Madrid (12/1)</p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/paparazzi-at-prince-william-birth-2013-7#ixzz2ZnqY2kYN" >This Photo From Prince William's Birth Shows How Out Of Control Paparazzi Have Become</a></strong></p>
<p><a href="http://www.businessinsider.com/7-weirdest-things-you-can-bet-on-2013-7#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/super-bowl-betting-strategy-2013-1Here's The Smartest Way To Bet On The Super Bowlhttp://www.businessinsider.com/super-bowl-betting-strategy-2013-1
Thu, 31 Jan 2013 12:23:00 -0500The Linemakers on Sporting News
<p><img style="float:right;" src="http://static4.businessinsider.com/image/510aa3b569beddb75300000b-398-298/baltimore-ravens-ray-rice-4.jpg" border="0" alt="baltimore ravens ray rice" width="398" height="298" /></p><p>We&rsquo;re just a few days away from kickoff, so it&rsquo;s time to start pinpointing your betting strategy for Super Bowl Sunday. There are practically countless ways to wager on 49ers vs. Ravens &ndash; the point spread, the total, the money line and <a href="http://linemakers.sportingnews.com/nfl/2013-01-28/super-bowl-props-bets-49ers-vs-ravens-odds-betting-lines-las-vegas-picks">pages upon pages of props</a>. The Linemakers are here to offer some guidance.</p>
<p>The best piece of advice we can give you is to treat the Super Bowl like it&rsquo;s just another game. In other words, don&rsquo;t step out<em> just because it&rsquo;s the Super Bowl</em> and risk five or ten times your normal bet.</p>
<p>Ravens money last week pushed the point spread down to 49ers -3.5 at a lot of sports books. But we&rsquo;re starting to see <a href="http://linemakers.sportingnews.com/nfl/2013-01-28/49ers-vs-ravens-point-spread-super-bowl-betting-line-las-vegas-odds-peppermill">more 4s pop back up</a>, and that&rsquo;s where we see the game closing -4 feels like the right number. So if you like the 49ers on Sunday, you may want to grab the 3.5 while you still can.</p>
<p>Linemakers Rick Herron and Richie Baccellieri have different opinions on the game, but they can both win their bets. Rick is leaning to the dog and thinks there&rsquo;s a chance he&rsquo;ll be able to get them at +4.5. Richie likes the 49ers on the money line (-170).</p>
<p>We&rsquo;ve told you this before, but the value is typically with the favorite on the Super Bowl money line. The public likes to take its shots on the underdog to win outright at plus-money, and the books adjust accordingly. That means there&rsquo;s no value with the dog on the money line.</p>
<p>&ldquo;The value is always stripped on the underdog money-line by about 20 percent, because that&rsquo;s the side the majority of money-line bettors will take,&rdquo; <a href="http://linemakers.sportingnews.com/nfl/2013-01-22/ravens-vs-49ers-super-bowl-xlvii-47-betting-strategy-vegas-line-point-spread">Micah Roberts wrote last week</a>. &ldquo;If wanting some plus-money on the dog, the better value is playing a few of the special point-spread props that are booked as their own entity and not tied in with the game.&rdquo;</p>
<p>Want a can&rsquo;t-lose betting strategy? Well, one doesn&rsquo;t exist. But Richie suggests putting yourself in a situation where you can minimize your risk and maximize your potential win. That strategy involves betting the 49ers on the money line, and taking the Ravens plus the points.</p>
<p>Here&rsquo;s how that could work:</p>
<p>Bet $170 to win $100 on the 49ers on the money line; also bet $165 to win $150 on the Ravens at +4. It&rsquo;s impossible to lose both bets, yet you can win both.</p>
<p>If San Francisco wins by 5 or more, you win $100 on the 49ers money-line bet, but lose $165 on the Ravens. <strong>Net loss of $65</strong>.</p>
<p>If Baltimore wins outright, you lose $175 on the 49ers money line, but win $150 on the Ravens with the point spread. <strong>Net loss $25.</strong></p>
<p>But if the 49ers win by a field goal or less, you cash both tickets. <strong> Profit of $250.</strong></p>
<p>And if the 49ers win by exactly 4, you push on the Ravens and claim your $100 winning on the money line bet. <strong>Net profit of $100.</strong></p>
<p>So if you&rsquo;re willing to put yourself in a worst-case scenario of losing $65, you can set yourself up for a tidy $250 win &ndash; and have a heck of a lot of fun watching the biggest game of the year.</p><p><a href="http://www.businessinsider.com/super-bowl-betting-strategy-2013-1#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/louisville-biggest-bcs-bowl-upset-in-history-2013-1Louisville's Sugar Bowl Victory Over Florida Was The Biggest Upset In BCS Bowl Historyhttp://www.businessinsider.com/louisville-biggest-bcs-bowl-upset-in-history-2013-1
Thu, 03 Jan 2013 12:32:00 -0500Andrew Tredinnick
<p><img style="float:right;" src="http://static4.businessinsider.com/image/5058b2cfeab8ea173d000000-400-300/teddy-bridgewater.jpg" border="0" alt="Teddy Bridgewater" width="400" height="300" /></p><p>Louisville captured a shocking 33-23 <a href="http://www.businessinsider.com/blackboard/sugar" class="hidden_link">Sugar</a> Bowl victory over Florida last night, and to be honest, it was never really close.</p>
<p>It was the biggest upset in BCS Bowl history, with the Cardinals winning as 14.5-point underdogs, according to <a href="https://twitter.com/ESPNStatsInfo/status/286840205779034112">ESPN Stats &amp; Info</a>.</p>
<p>They were just the third double-digit underdog to win a BCS bowl since the series was established in 1998, joining Ohio State's team in 2002 and Oklahoma in 2000.</p>
<p>Miami was favored by 12 points against the Buckeyes in the 2002 BCS National Championship, and Florida State was given 11.5 points to the Sooners in the 2000 national title game.</p>
<p>To put things in perspective, Northern Illinois was a 13.5-point underdog against Florida State in the <a href="http://www.businessinsider.com/blackboard/orange" class="hidden_link">Orange</a> Bowl. The Huskies lost by 21.</p><p><a href="http://www.businessinsider.com/louisville-biggest-bcs-bowl-upset-in-history-2013-1#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/obamas-election-odds-improved-at-intrade-ladbrokes-and-william-hill-2012-10Obama's Election Odds Improved At Intrade, Ladbrokes, And William Hillhttp://www.businessinsider.com/obamas-election-odds-improved-at-intrade-ladbrokes-and-william-hill-2012-10
Wed, 17 Oct 2012 06:15:13 -0400Tom Chivers
<p><img style="float:right;" src="http://static1.businessinsider.com/image/507e84f3ecad04020900004d-400-/bookie.jpg" border="0" alt="bookie" width="400" /></p><p>Reading around this morning, everyone's got a theory about who won last night's Big American Chat between Barack Obama and <a class="hidden_link" href="http://www.businessinsider.com/blackboard/mitt-romney">Mitt Romney</a>. <a href="http://www.guardian.co.uk/world/2012/oct/17/obama-win-second-presidential-debate?newsfeed=true">"Obama regains the initiative to win second presidential debate"</a>, claims <em>The Guardian</em>, pointing to "gaffes" over Benghazi and something about "binders full of women", which sounds positively Silence of the Lambsian. <a href="http://blogs.telegraph.co.uk/news/timstanley/100185283/obama-won-the-debate-on-points-but-some-morning-after-fact-checking-might-even-out-the-score/">Our own Tim Stanley thinks that Obama "won on points"</a> but that he may suffer under fact-checking. "It wasn't enough," <a href="http://liberalconspiracy.org/2012/10/17/why-obama-didnt-turn-it-around-and-why-change-matters/">fretted Liberal Conspiracy's Sunny Hundal</a>. <a href="http://www.washingtonpost.com/blogs/plum-line/post/obama-turns-it-around/2012/10/16/85218870-1805-11e2-9855-71f2b202721b_blog.html">The Washington Post's Greg Sargent thinks Obama "turned it around"</a>.</p>
<p>Who's right? Well, we could look at the instant reaction polls. <a href="http://fivethirtyeight.blogs.nytimes.com/2012/10/17/instant-reaction-polls-show-narrow-obama-advantage-in-second-debate/">FiveThirtyEight found an unusual level of agreement in them</a>, that Obama did slightly better,in state and national polls, though not as well as Romney in the first. But, and here's the key, "The relationship between the quick-reaction polls and their eventual effect on the horse-race polls <a href="http://fivethirtyeight.blogs.nytimes.com/2012/10/04/oct-3-romneys-electoral-challenge-and-more-on-debate-instant-polls/">has historically been very modest</a>, and has sometimes even run in the opposite direction of what the initial polls suggested." So Obama's slight apparent victory in the debate tells us nothing whatsoever about who's actually going to win the thing.</p>
<p>I'd like to return to Nicholas <a class="hidden_link" href="http://www.businessinsider.com/blackboard/nassim-taleb">Nassim Taleb</a>, <a href="http://blogs.telegraph.co.uk/news/tomchiversscience/100185157/fooled-by-randomness-in-the-us-election-why-we-shouldnt-pay-too-much-attention-to-daily-polls/">the author of Fooled by Randomness whom I mentioned in yesterday's post on this subject</a>. He suggests that, rather than listening to the views of people like me, who have to say something entertaining every day but won't lose our jobs or money if we're wrong, we should listen to people who have to be right more often than they're wrong or they will go broke. The obvious people would be bookmakers. Bookmakers who regularly get the odds wrong would have to find new jobs fairly quickly.</p>
<p>Luckily, I wrote down a few of the odds on offer yesterday:</p>
<p><em><a class="hidden_link" href="http://www.businessinsider.com/blackboard/betfair">Betfair</a></em>: Obama 40/85, Romney 80/45<br /> <em>Ladbrokes</em>: Obama 4/9, Romney 7/4<br /> <em>William Hill</em>: Obama 4/9, Romney 7/4<br /> <em>Intrade</em> (not technically a bookmaker but): Obama 62 per cent, Romney 38 per cent</p>
<p>And today:</p>
<p><em><a href="http://sports.betfair.com/politics/market?id=1.21311313&amp;q=us%20election">Betfair</a></em> : Obama 40/85, Romney 11/5<br /> <em><a href="http://sports.ladbrokes.com/en-gb/politics/us-presidential-election/2012-us-presidential-race-e212304268">Ladbrokes</a></em>: Obama 4/11, Romney 2/1<br /> <em><a href="http://sports.williamhill.com/bet/en-gb/betting/e/1451382/Next-Presidential-US-Election.html">William Hill</a></em>: Obama 2/5, Romney 2/1<br /> <em><a href="http://www.intrade.com/v4/markets/contract/?contractId=743474">Intrade</a></em>: Obama 63.5 per cent, Romney 36.5 per cent</p>
<p>(<em><a href="http://fivethirtyeight.blogs.nytimes.com/2012/10/17/instant-reaction-polls-show-narrow-obama-advantage-in-second-debate/">FiveThirtyEight</a></em> puts the probabilities about the same, by the way: Obama 64.8 per cent, Romney 35.2 per cent.)</p>
<p>So who won the debate? Well, you could look at the very slight shift in the odds towards Obama, and say "Obama". Or you could say "wait, <a href="http://blogs.telegraph.co.uk/news/tomchiversscience/100185157/fooled-by-randomness-in-the-us-election-why-we-shouldnt-pay-too-much-attention-to-daily-polls/">didn't you tell us yesterday</a> not to look frantically at every tiny change in the data? And given that Romney got such a big bump off the last one, shouldn't we expect a reversion to the mean anyway, so it would be frankly implausible for Romney not to lose a few points this time?"</p>
<p>And you'd be right. Did Romney win? Did Obama win? Who knows? <a href="http://plainblogaboutpolitics.blogspot.co.uk/2012/10/was-it-debate.html">Jonathan Bernstein, who writes "A Plain Blog About Politics"</a>, points out that if you use the "less smoothing" tool on Pollster's poll-tracker ("call it the <a class="hidden_link" href="http://www.businessinsider.com/blackboard/andrew-sullivan">Andrew Sullivan</a> option"), the polls sometimes move as much as five points overnight: implausible. Moderate smoothing shows that Romney got a big bump after the first debate. And "more smoothing" shows Obama with "the same 2.5 point lead he's had all year".</p>
<p>Maybe a significant number of people changed their minds after last night, maybe they didn't. We don't know. The only piece of even vaguely reliable information we have is that the bookies, the poll-tracking odds-of-victory and the trading-exchange website all think Obama has about a two-thirds chance of winning. That's pretty much the same post-debate as it was pre-debate. I think XKCD's point about sports commentary applies almost perfectly here:</p>
<p><img class="nc_pixel" src="http://pixel.newscred.com/px.gif?key=YXJ0aWNsZT0xYjcxOWU1OWI0YTlmYmU1ZDI4ZmNkNzFmYjAwZTQzNyZvd25lcj1hZWE2NjI4NzUzY2RjZGMzMjhkOTkzM2MwZTIwZDU4YyZub25jZT1lN2M3ZjJmMC0yYTAyLTQzOTctYTdlOS03OTgwMTBmODNlNWQmcHVibGlzaGVyPThjMDBmYmVlNjFkNWJjZjBjNjA5MmQ4YjkyZWJiY2Ex" border="0" alt="" width="1" height="1" /></p><p><a href="http://www.businessinsider.com/obamas-election-odds-improved-at-intrade-ladbrokes-and-william-hill-2012-10#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/uncertainty-and-risk-in-the-suicide-pool-2012-9Uncertainty And Risk In The Suicide Poolhttp://www.businessinsider.com/uncertainty-and-risk-in-the-suicide-pool-2012-9
Sat, 29 Sep 2012 21:17:58 -0400John Mauldin
<div>
<p><a href="https://mail.google.com/mail/u/0/?ui=2&amp;view=btop&amp;ver=lsvjwajrtlp4&amp;search=inbox&amp;th=13a142692709d1e4&amp;cvid=1#13a142692709d1e4_new"><img style="float:right;" src="http://static1.businessinsider.com/image/50679d7deab8ea2831000023-400-/dark-pool.jpg" border="0" alt="dark pool" width="400" /></a>New Publishing Schedule for&nbsp;<em>Thoughts from the Frontline</em></p>
<p><em></em>Jumping into the Suicide PoolProbability Theory and Retirement Portfolios</p>
<p>Obsessing on Risk, Ignoring Uncertainty</p>
<p>An Uncertain Spain</p>
<p>Orlando, Portland, Atlanta, and South America</p>
</div>
<p style="padding-left: 30px;">&ldquo;By &lsquo;uncertain&rsquo; knowledge, let me explain, I do not mean merely to distinguish what is known for certain from what is only probable. The game of roulette is not subject, in this sense, to uncertainty; nor is the prospect of a Victory bond being drawn. Or, again, the expectation of life is only slightly uncertain. Even the weather is only moderately uncertain. The sense in which I am using the term is that in which the prospect of a European war is uncertain, or the price of copper and the rate of interest twenty years hence, or the obsolescence of a new invention, or the position of private wealth owners in the social system in 1970. About these matters there is no scientific basis on which to form any calculable probability whatever.&rdquo;</p>
<p style="padding-left: 30px;">-John Maynard Keynes,&nbsp;<em>The General Theory of Employment,</em>&nbsp;1937</p>
<p style="padding-left: 30px;">&ldquo;... there are known knowns; there are things we know that we know. There are known unknowns; that is to say there are things that, we now know we don't know. But there are also unknown unknowns &ndash; there are things we do not know we don't know.&rdquo;</p>
<p style="padding-left: 30px;">-Donald Rumsfeld, Secretary of Defense, 2002</p>
<p style="padding-left: 30px;">&ldquo;There are four types of men:</p>
<p style="padding-left: 30px;">1. One who knows and knows that he knows... His horse of wisdom will reach the skies.<br />2. One who knows, but doesn't know that he knows... He is fast asleep, so you should wake him up!<br />3. One who doesn't know, but knows that he doesn't know... His limping mule will eventually get him home.<br />4. One who doesn't know and doesn't know that he doesn't know... He will be eternally lost in his hopeless oblivion!&rdquo;</p>
<p style="padding-left: 30px;">-Ibn Yami, 13<sup>th</sup>-century&nbsp;<a href="http://email.mauldineconomics.com/wf/click?upn=UU9rSsolDPv1oxGnu8Y6-2BvwT-2FS3C8Js6i8P-2Bp3yyRwKicrRMXizZs7wpGKuFLYD7ED-2FgM-2FQ2lr3y60OwPWhmZA-3D-3D_URoZ3LXm8aQKDOZA-2FklbyoJXexduGVpA-2FcDsb7KbwAk-2BTsuHzBmWmAR0GQ-2FegqwngN7-2FDUTRGlmVqIWVuO8d-2BAu1Pqj5-2FLP7h-2Bm1flXY-2FX31BtSga9Y6Nvg08ESot868tKDpiChe4flZtjnHvBTPtL1qB6-2B1XwSpJhLi0-2F3UkKrpXcrpgZj5cMPE2umesDzny-2FB35kqz4V-2BCrsFhqULS-2Bw-3D-3D" target="_blank" title="Persian people">Persian</a>-<a href="http://email.mauldineconomics.com/wf/click?upn=UU9rSsolDPv1oxGnu8Y6-2BvwT-2FS3C8Js6i8P-2Bp3yyRwIKew1P9sDL4tq5ii7Zy-2BNA_URoZ3LXm8aQKDOZA-2FklbyoJXexduGVpA-2FcDsb7KbwAk-2BTsuHzBmWmAR0GQ-2FegqwngN7-2FDUTRGlmVqIWVuO8d-2BBCIbfPh-2Fkg7C8Tv-2Bk43yUb8Ck2fIpPN8reLPMsc4JDGcH7ib493q82jIsNz5jCS33KFk4N5Ms9taUqWPDv5UmtCC57friO85EK5AQFwicLX4REGdcVgcTFULorza6Aa9A-3D-3D" target="_blank" title="Tajik people">Tajik</a>&nbsp;poet</p>
<p>For the past 80 years, we have created ever more sophisticated models of risk in the economic and investment worlds. With each new tool we create to measure risk, we seem to think we have somehow gained more control over our future. Paradoxically, we appear to believe that the more we understand risk, the more we can somehow control our exposure to it. The more we build elaborate models and see correlations between events and the performance of our investments and the economy, the more confident we become.</p>
<p>And if by some ill fortune we encounter a period of lengthy stability in our models and portfolio performance, we are likely to imbibe a cocktail of collective hubris: we actually think we understand some things in a quantifiable way. We thereupon seek to take on more risk at precisely the time when additional risk is the most disastrous. This week we explore the difference between risk and uncertainty. Perhaps we can even tie all this into our understanding of secular bull and bear markets.</p>
<h3><a name="13a142692709d1e4_new"></a>New Publishing Schedule for&nbsp;<em>Thoughts from the Frontline</em></h3>
<p>But first, for those who missed this week&rsquo;s announcements about new activities at Mauldin Economics, let me very briefly summarize. Beginning next week,&nbsp;<em>Thoughts from the Frontline</em>&nbsp;will be written on Sunday afternoon/evening and hopefully arrive in your inbox early Monday morning.&nbsp;<em>Outside the Box</em>&nbsp;will now come to you on Friday for your weekend reading pleasure.</p>
<p>The reason for this change is, frankly, that it is taking me longer and longer to write&nbsp;<em>TFTF</em><em>.</em>&nbsp;I jokingly suggest to friends it may be because I have quit drinking and lost the inspiration of wine and scotch. But for the most part, it&rsquo;s the sheer amount of material I consult while writing, coupled with the complexity of our world. As a consequence, I find myself walking and thinking about what I write more than ever.</p>
<p>Plus, the alcohol&nbsp;<em>might</em>&nbsp;have been a way of self-medicating my ADD. Or maybe I'm just getting older, and the policemen who stop me at night on my walks around the neighborhood are right to think I am somewhat confused.</p>
<p>Whatever the reason, Friday afternoons in the early years became Friday evenings and then morphed into Saturday mornings. Which means my weekend was shot, taking away some of the pleasure I get from writing. Regardless, I think the new schedule will improve the letter, as well as give me some more time to think about the events of the week just past, and the week ahead.</p>
<p>Finally, regular readers of&nbsp;<em>Outside the Box</em>&nbsp;are familiar with Grant Williams, who writes the wickedly brilliant&nbsp;<em>Things That Make You Go Hmmm....</em>&nbsp;Grant has very graciously agreed to allow Mauldin Economics to become the publisher of his letter, and it will become a regular part of our offerings to you. Grant is an addictive essayist, and I think you will soon agree with me that he is the best &ldquo;new&rdquo; writer to come along in a very long time.</p>
<p>We have also announced a new publication, called&nbsp;<em>Bull&rsquo;s Eye Investor,</em>&nbsp;a monthly newsletter that Grant will also write. Grant manages $250 million in a hedge fund in Singapore, with a total global mandate. We are philosophically very close in how we approach investing and the markets, and I&rsquo;m excited that he will be writing what will become our flagship publication, bringing the same global perspective to his specific recommendations.&nbsp;<a href="http://email.mauldineconomics.com/wf/click?upn=U8GusXYvzQrI-2BTfpBInOiw4cuS1SqQfCbK1N-2BAM97HHoZRwnw6yAFP3q0v5zmtqJdiTxlzhRy7dyNnyiaj1zJg-3D-3D_URoZ3LXm8aQKDOZA-2FklbyoJXexduGVpA-2FcDsb7KbwAk-2BTsuHzBmWmAR0GQ-2FegqwngN7-2FDUTRGlmVqIWVuO8d-2BBaUuwnAMy9bKpbRXx9ThLHWJUHwBDkK7PFW-2FMgdsDLTNIxAo4-2Bj-2FEy7mz776xaAZG5heqpUTyBBTa9oyOHrs91OeZzzIgR7Nm13N29mrebWTFZZWHaUE8XDExwzyfNxKidx4JMX4m7PIlzdvnXrNcI-3D" target="_blank">You can click here to learn more</a>. Now, since the above amounted to mostly known knowns, let&rsquo;s embark on a trek into the world of uncertainty.</p>
<h3><a name="13a142692709d1e4_jumping"></a>Jumping into the Suicide Pool</h3>
<p>My oldest son Henry and my son-in-law Allen Porter are both in their late 20s, perfect gentleman, appropriately humble, engaging, and thoughtful young men. Unless you are talking about sports, when they become opinionated, overly self-confident, and quite willing to share their intimate knowledge of the subtleties and nuances of sports in general but football in particular. For the last few seasons, my friend Barry Habib has enticed the three of us to participate in what is known as a Suicide Pool.</p>
<p>A Suicide Pool is a betting pool &ndash; with a twist. Starting with the second game of the season, participants simply have to pick one winner out of all the games that are played that week. There are no point spreads involved and no handicaps. All you have to do is predict just one team that will win that week. Every week, if you like, you can pick the team that is the most heavily favored to win. There are no restrictions on your choices.</p>
<p>At the beginning of the season you &ldquo;invest&rdquo; $100 into the pool. And you stay in the pool as long as the team you pick wins. If more than one person survives to the end of the season, the winner is decided by cumulative point spreads. If you go out the first week, you are allowed to buy back in for $50 plus a point-spread penalty.</p>
<p>Notice the word&nbsp;<em>if.</em>&nbsp;Having done this for a few years, I have noted that the survival rate is actually quite small. The trick is not to pick close games but just to survive. But even if you are trying to choose the safest picks, every now and then there is a secular bear market among the top teams.</p>
<p>So, I bought spots for Henry, Allen, and myself. Since I know absolutely nothing about what teams to pick, Henry and Allen chose them for me. My only instructions were to choose the safest pick and never to choose the Cowboys. It is bad enough to have the home team lose without losing your money as well. After 50 years, I&rsquo;ve had too many heartbreaks watching the Cowboys to want to bet on them.</p>
<p>I figured the Suicide Pool would give us guys something to talk about and share a few laughs over, at least for a few months. But as US football fans know, in the past few weeks there has been the equivalent of a market crash rivaled only by the NASDAQ in 2000-2001.</p>
<p>This year has been a disaster for us Suicide Poolers. We started with 148 in the pool. We lost 78 football &ldquo;experts&rdquo; (!) in the first week, but 57 of those (including your humble analyst) had enough hubris to buy back in to the pool. (The winner would get $17,600 &ndash; enough to keep you fully invested.) After a second straight week of major upsets, there were only 21 people still standing, or about 14% of the original 148. Even worse, only eight (about 5%) were able to pick two winning teams in a row.</p>
<p>Note that my brain trust picked two prohibitive favorites, the least risky choices available. They agreed with my plan to avoid risk and also agreed on the teams we should all choose, rather than diversifying our risk. I went with my experts. We chose the <a class="hidden_link" href="http://www.businessinsider.com/blackboard/new-england-patriots">New England Patriots</a> the first week and the <a class="hidden_link" href="http://www.businessinsider.com/blackboard/pittsburgh-steelers">Pittsburgh Steelers</a> the next. And we were not part of the elite 5%. No family-time discussions and debates, just commiseration and licking our wounds. I was hoping that at least one if not more of our chances would carry us a few months into the season, providing us with some good times, making game time a little more interesting &ndash; the whole thing seemed like a good investment at the time.</p>
<p>(Clearly, my choice of investment advisers this year has not been optimal. Wait till next year. Only, next year I&rsquo;m going with the real sports authority in the family, my daughter Abbi.)</p>
<h3><a name="13a142692709d1e4_prob"></a>Probability Theory and Retirement Portfolios</h3>
<p>While this is a cute story, there is, sadly, an investment implication. While no one would call betting on football an investment (except a bookie, and he is really investing in human frailty and probabilities and not, strictly speaking, football), all too often investors approach the markets in a fashion distressingly similar to my approach to betting on football. You either think you are an expert on the stock market, or you hire someone whom you think is. And while we are a great deal more serious about our investments, here too we try to pick safe investments that will last us for the long run. We use models to outline the probability of success or failure, and all too often we ignore the low probabilities that would be absolutely disastrous if they came about.</p>
<p>In most places and in most times, withdrawing 5% a year from a retirement portfolio is a reasonable approach. But not in all places and certainly not at all times. Your retirement plan should not be the investment equivalent of the Suicide Pool.</p>
<p>Many investors are told that it is safe to take 5% of their savings each year to spend on retirement. And the history of the last 110 years suggests that on average this is true. But every now and then people retire at the beginning of a secular bear market. Taking out 5% at such times is about as safe as betting on football.</p>
<p>My friend Ed Easterling at Crestmont Research did some very basic research which shows that if you retire and decide to keep your retirement savings 100% in stocks, then if you begin to invest your savings at a 5% withdrawal rate during a period when stocks are in the highest 25% of the historical average of valuation (P/E ratios), about 5% of the time you will be out of money within 23 years.&nbsp;</p>
<p>And this outcome has a probability that we can model. Of course, we can&rsquo;t tell you what your actual experience will be, but we can demonstrate that you are involved in risky behavior! Typically, investors are comfortable taking such a risk, because at the end of a secular bull market stocks have been performing well for a very long time. All the models show the bull will continue &ndash; or at least the ones you get to see. (You can read Ed&rsquo;s full report at&nbsp;<a href="http://email.mauldineconomics.com/wf/click?upn=U8GusXYvzQrI-2BTfpBInOi7E1CThSP6F3zSRLpS-2BMToG2PeXo2rqqloVIAA-2BinwvsKmbcbAdPvN-2FcgsHpDqtFTenyQRKGOxiSr-2B90wgBRzME-3D_URoZ3LXm8aQKDOZA-2FklbyoJXexduGVpA-2FcDsb7KbwAk-2BTsuHzBmWmAR0GQ-2FegqwngN7-2FDUTRGlmVqIWVuO8d-2BN5Ac-2BVX-2BrhfxufZlCijg1TXZiOkreqg-2FmaxypFsCZeXkK2ZSnfcJqRc6RiAzVXYeXn8KXUn5-2Fd2hrM7L2ZXGXLL-2F3KeYiL-2FAkWklWgsaCyqkCWjpbN-2FgcjWcRgyKZ-2B01kEDOWNzbLWDo8T1jxNh7co-3D" target="_blank">http://www.crestmontresearch.com/docs/Stock-Retirement-SWR.pdf</a>.)</p>
<h3><a name="13a142692709d1e4_ob"></a>Obsessing on Risk, Ignoring Uncertainty</h3>
<p>Investors in the stock market, especially professionals, are obsessed with risk, your humble analyst included. We try to measure risk in any number of ways, looking for an edge to improve our returns. Not only do we try to determine probable outcomes, we also look for the &ldquo;fat tail&rdquo; events, those things that can happen which are low in probability but will have a large impact on our returns.</p>
<p>I have found that it was the surprises that were not in my model that were the true drivers of portfolio performance. We like it when surprises produce a positive result, and we often find a way to congratulate ourselves for our wise choices. No one in 1982 thought that price-to-earnings ratios would rise by five times in the next 18 years. Yet that simple driver accounted for 60% of the last bull market (20% was inflation and only 20% was actual increased earnings). And while a few people began to invest in technology in the early &rsquo;80s, many of those early technology stocks ended up being disasters. (Remember Wang? Osborne? Sorry, I know, you were trying to forget.)</p>
<p>&ldquo;In 1910 the British journalist Norman Angell published a book called &lsquo;The Great Illusion&rsquo;. Its thesis was that the integration of the European economy, and by implication the global economy too, had become so all-embracing and irreversible that future wars were all but impossible. The book perfectly captured the zeitgeist of its time and fast became a best seller.</p>
<p>&ldquo;In some respects, the early 20th century was a period much like our own &ndash; one of previously unparalleled global trade and exchange between nations. Human beings appeared largely to have outgrown their propensity to mass slaughter, and everyone could look forward to to a world of ever increasing prosperity. War, Angell compellingly argued, was economically harmful to all, victors and defeated alike. Self interest alone could be expected to prevent it happening again.&rdquo; (Jeremy Warner writing in&nbsp;<em>The London Telegraph)</em></p>
<p>On the eve of World War I, bond markets throughout Europe were not pricing in a conflict. Everyone &ldquo;knew&rdquo; there would not be a war. It was all bluff and bluster. And then the world got a surprise. Archduke Ferdinand was assassinated and armies began to march. And while no one expects a war today in Europe, there are certainly plenty of tensions.</p>
<h3><a name="13a142692709d1e4_an"></a>An Uncertain Spain</h3>
<p>The Spanish government announced this week a rather severe austerity budget. They promise they will hold their budget deficits to 6.3% while slashing spending almost 9% and raising taxes. And of course there will be no wage increases for government workers. They also assume that growth will only fall to -0.5% in the face of that austerity, which most observers think is woefully optimistic.</p>
<p>Even though the ECB has committed to buying Spanish bonds, they have made it clear that they will do so only as long as Spain is committed to bringing its deficit under control.</p>
<p>&ldquo;<a class="hidden_link" href="http://www.businessinsider.com/blackboard/european-central-bank">European Central Bank</a> Executive Board member Joerg Asmussen said on Friday that he would only support purchasing the bonds of struggling&nbsp;<a href="http://email.mauldineconomics.com/wf/click?upn=U8GusXYvzQrI-2BTfpBInOi0A-2BH9kAhsHT5u4W2dP2kwFtFVfEbGUasLMawZSQbUp9_URoZ3LXm8aQKDOZA-2FklbyoJXexduGVpA-2FcDsb7KbwAk-2BTsuHzBmWmAR0GQ-2FegqwngN7-2FDUTRGlmVqIWVuO8d-2BIDbllRECLKE-2FcRke5Q5995TgHUnZBlSHG2wyh-2BrBh2g0PAsGNKWoiMchZLDI3Ja0iZSnZLeGeqJMVtyD5REPwQ26ED3mku-2F1BuCo6NPJj7tohh6xw97m8VYzk-2BUUTj72ueBtJLMYoXHCdGgd-2BR2iu8-3D" target="_blank" title="Full coverage of Euro Zone">euro zone</a>&nbsp;countries if pressure on them to reform their economies remained high. &lsquo;Only under strict conditionality and only if there is continued pressure to reform,&rsquo; Asmussen said of the bond purchase plan announced by ECB President Mario Draghi earlier this month.&rdquo; (<a class="hidden_link" href="http://www.businessinsider.com/blackboard/reuters">Reuters</a>)</p>
<p>And if things were not already difficult enough for Spanish Prime Minister Rajoy, one of my favorite regions of Spain, Catalonia, which includes the beautiful city of Barcelona, is seriously talking about seceding from Spain. As much as 20% of the population (1.5 million) turned out for a march supporting independence last week.</p>
<p>Prime Minister Rajoy met with Catalonia&rsquo;s president and flatly rejected any autonomy or more money. Catalonians are not happy that they send a great deal of money to Madrid, which goes to other regions as they deal with their own crises. So much for &ldquo;all for one and one for all.&rdquo;</p>
<p>The situation is complicated by the fact that the Basque region of Spain has been given a great deal of autonomy in its budget. If Spain were to compromise and give Catalonia the same deal, it would cost the Spanish government a great deal of money and enlarge the already gaping hole in their budget.</p>
<p>&ldquo;Separately, the parliament of Spain&rsquo;s most economically important region,&nbsp;<a href="http://email.mauldineconomics.com/wf/click?upn=U8GusXYvzQrI-2BTfpBInOi9eVhY0iquKeJ-2BOCuK9RJJ3KNQh5RaWN8BApdNpjFttubnmRD7D49cIgBATGZBfATFeB24spzr4LWcghTl8JE-2BQ-3D_URoZ3LXm8aQKDOZA-2FklbyoJXexduGVpA-2FcDsb7KbwAk-2BTsuHzBmWmAR0GQ-2FegqwngN7-2FDUTRGlmVqIWVuO8d-2BBbFEkD-2BQYR-2FKlJKULeuhZEXdpu7ONa8bt-2BlXqbYOj-2BtppUCSE3HCecRkw1n0U3aiPHNGn90VMjrzMnVkTS3rh8k28mHk-2Bs9TZeBfZioC-2B8GjFZZXFnNEhduQhHOSr1SvW-2BZW-2BjyHNY5HLd0JhvmuV4-3D" target="_blank" title="Q&amp;A: Catalonia&rsquo;s sovereignty push">Catalonia</a>, approved holding a referendum on independence. Ms Saenz de Santamaria threw down the gauntlet to Spain&rsquo;s most economically important region, arguing that Madrid could use a constitutional measure to block any attempt at a separatist vote. &lsquo;Not only do instruments exist to prevent [a referendum], there is a government here that is willing to use them,&rsquo; she said.&rdquo;&nbsp;<em>(The Financial Times)</em></p>
<p>Casually browsing news on the Catalonian crisis, I came across an article on previous referenda concerning independence, held on a city-by-city basis in Catalonia. Independence was favored in nearly all cities by margins of 90% or more. This was rather surprising to me, as I am not certain I could get 90% of my neighbors to agree on the time of day.</p>
<p>In addition to the Basque and Catalonian regions, there are two other northern Spanish regions that send net revenues further south. If you give Catalonia budgetary autonomy, let alone political autonomy, then what do you do for the other two?</p>
<p>Which brings up the uncertainty in the entire euro project. It is one thing to create a common market in which goods and services can freely trade. It is another to impose monetary and fiscal authority on a sovereign nation. If economic tensions within the regions of Spain begin to move voters to push for independence from central control, how much more inclined will voters in the various eurozone nations be to do so?</p>
<p>Germany is just now entering a recession that has the real potential to get much worse. If Germany is asked to write checks and send them to other countries when they are in the midst of their own financial crisis, how will that play in Bavaria?</p>
<p>The only thing I can be certain about regarding Europe is that Europe is an uncertain mess. But the markets go on treating all these pressures as if they were not real. And, indeed, perhaps the mess will all get sorted out.</p>
<p>It is my belief that we focus on risk because it is something that we can model. The economics profession has physics envy. Economists like to think of themselves as scientists, but I must say that I am not convinced. Economics has a great deal to teach us, but it cannot tell us much about certainty. It can&rsquo;t even help us all that much to avoid risk.</p>
<p>I fear we don&rsquo;t pay enough attention to uncertainty because we cannot reduce it to an equation. How did you price in the risk of Catalonia succeeding from Spain, even two months ago? The answer is that no one did.</p>
<p>The US market seems to be focused on the &ldquo;fiscal cliff&rdquo; that will inevitably create a recession unless Congress does something. The fact that doing nothing will clearly create a recession gives me some confidence that even Congress will figure out a way to avoid doing nothing. What has not been priced in is what Congress will do about the deficit. Depending on what they do, what we get will be hugely positive or negative. But we remain totally uncertain as to what they will actually do. And so for years we have ignored the looming train wreck that is unfunded liabilities.</p>
<p>It is the fact that the results of inaction on the deficit are uncertain that allows Congress to keep postponing the inevitable.</p>
<p>&ldquo;About these matters there is no scientific basis on which to form any calculable probability whatever.&rdquo;</p>
<p>We live in most uncertain times.</p>
<h3><a name="13a142692709d1e4_or"></a>Orlando, Portland, Atlanta, and South America</h3>
<p>I am in New York tonight, writing as I look down on Times <a class="hidden_link" href="http://www.businessinsider.com/blackboard/square">Square</a>. Starting Sunday afternoon I&rsquo;m booked solid with meetings until I get on a plane to Orlando on Tuesday afternoon. Monday night Tom Romero and I will host a dinner for a few friends. What started out as a small dinner has grown into a small crowd. There will be between 20 and 25 of us seated around a square table so that we can see and talk with each other. I have decided to give everybody a yellow flag they can throw at any time to comment on another participant&rsquo;s musings. Only one flag per night per person, but that should make it interesting. Too many names to mention, so let&rsquo;s just say, the usual suspects. Okay, two names. My Dr. Richard Roizen is coming, and he is bringing someone called Mehmet Oz.</p>
<p>I will be at the <a class="hidden_link" href="http://www.businessinsider.com/blackboard/ubs">UBS</a> conference with my partners from Altegris and will also spend an evening with my good friend Pat Cox, who writes&nbsp;<em>Breakthrough Technology Alert.</em>&nbsp;I am sure we will talk about the latest technologies and especially those that may help both of us fight off the ravages of growing older. Pat has the prototype of a new &ldquo;toy&rdquo; that he is raving about. I have been able to procure a prototype as well, and if it works even half as well as the study results out of Stanford suggest, I will let you know. Just think of me as your friendly neighborhood guinea pig.</p>
<p>I will go to Portland the following week to speak for Common Sense Investments, and they have invited me to stay the next day and go pheasant hunting. I have never been pheasant hunting, let alone hunting at all. These are brave people who will hand me a shotgun and walk with me into the field. I will try not to do a Dick Cheney. And for all of you animal lovers, let me note that any bird I shoot at has a high probability of being missed. And that means I&rsquo;ll also be taking them out of range from anyone else who could actually shoot them.</p>
<p>Care to join me election night, November 6 ... in Argentina?&nbsp; From October 28 to November 8 I'll be in Brazil, Uruguay, and Argentina, speaking to regional chapters of the CFA Society. As part of the trip, I'm stopping by for the season-opening celebration, November 5-10, of friend and partner Doug Casey's lifestyle and sporting estate,&nbsp;<a href="http://email.mauldineconomics.com/wf/click?upn=U8GusXYvzQrI-2BTfpBInOixlTusv56UQQiyMFRkpQ-2BQ2vm36jFQ3tU5oi1PG-2BqzHYEv0ISmTxHBpkJiVIL-2FO-2FgA-3D-3D_URoZ3LXm8aQKDOZA-2FklbyoJXexduGVpA-2FcDsb7KbwAk-2BTsuHzBmWmAR0GQ-2FegqwngN7-2FDUTRGlmVqIWVuO8d-2BAQR53W-2FKNEBAdLbssdqTPPjVgKQN1TpvZAD8pMrm91lHKvIowXkerLH2DDejVl3xRVFdEyJRm5LpFw2XuVih8o-2BeT6EHny3i-2B1u9LFPfhzAbM93uKiACwwxeQhaglGUV5VszvZwsHNLEa9m-2FiyyBUc-3D" target="_blank">La Estancia de Cafayate</a>, where I'll host the group at a caf&eacute; on the scenic town plaza and watch the election results roll in.&nbsp; If you'd like to join me and a group of interesting folks from around the world in what promises to be a unique experience, drop Dave Norden a note at&nbsp;<a href="mailto:LiveMore@LaEst.com" target="_blank">LiveMore@LaEst.com</a>. David Galland has promised nonalcoholic beers for me for the evening. The recent polls suggest I might want something stronger, but I think I can hold out.</p>
<p>My oldest son, Henry, was having some problems as I left on this trip to Atlanta. Sitting on the plane, I got a message that they were testing his appendix, and that evening as I landed I learned they were taking it out. Oddly, I was relieved, as the symptoms he was having were making Dad nervous, given that he has early-onset diabetes. He is doing fine. But an event like this does bring the health-care debate up close and personal. On October 17 I am in Atlanta once again for Hedge Funds Care.</p>
<p>I fly back home on Wednesday, where I will watch the first Presidential debate with my youngest son, whose teacher has assigned him that task. The next morning I turn 63. I hope my new toy helps &ndash; I need all the help I can get. I&rsquo;ve also added a few new supplements that are just appearing on the radar screen. As I said, I am just a living guinea pig. If I notice anything, I will let you know.</p>
<p>It is time to hit the send button on what will be our last Friday night/Saturday morning newsletter. I stop here knowing that I will get to write next Sunday, rather than all night Friday, and I really believe I&rsquo;ll be more efficient. We&rsquo;ll see! Have a great week, and you might check out early voting &ndash; I already have.</p>
<p>Your going to sleep till the crack of noon analyst,</p>
<p><a class="hidden_link" href="http://www.businessinsider.com/blackboard/john-mauldin">John Mauldin</a><br /><a href="mailto:subscribers@MauldinEconomics.com" target="_blank">subscribers@MauldinEconomics.com</a></p><p><a href="http://www.businessinsider.com/uncertainty-and-risk-in-the-suicide-pool-2012-9#comments">Join the conversation about this story &#187;</a></p>